Rewiring your organization for innovation
There is no question that digital technology is transforming the face of business today, changing the way products and services are created, distributed and consumed. In the last few decades, we have gone through several waves of digital change which have transformed the way to go about our daily lives.
The dawn of the desktop internet in the 1990s gave us access to endless choices that have changed and redefined our relationships with service or product providers. Following that, the arrival of the smartphone in the 2000s introduced us to an entire new ecosystem of apps and cloud storage connected to geo-location and real-time contextual services. In the 2010s we witnessed the rise of “Living Services”, in which connected environments and contextual data move beyond the “Internet of Things”.
As the products and services embedded into our daily lives become digitized and connected, consumer expectations increasingly becoming more liquid. That means what they come to expect as the best-in class from one product or service will do, they will carry that expectation in that engagement with other product and services as well; consumer expectations now drive demand.
Every business is affected by this digital transformation. It opens up an infinite range of new opportunities for businesses to transform their offerings, operations and their relationship with customers. Their success depends on how they an organization is rewired to become one that is structured and organized around the premise that everything is constantly changing and has the capability in terms of people and the organizational design to respond accordingly.
This could manifest in several different ways such as new organization structures, new reward and performance criteria that value the input of individuals or new career trajectories to name a few. The result is a business that is always ready to pivot in response to change.
The rise of innovation
These disruptive forces are a call to action and have, if not emboldened, necessitated organizations to embark on a journey of innovation. However, many struggle to do it successfully or sustainably.
Design is often the process applied to drive innovation within organizations, by which design thinking methods are applied to problem solve and generate new value. The differentiator with design thinking from traditional modes of problem solving is that the focus is always on the end-user, either employees or customers. Whether you are designing a tangible product or intangible service, the offering must be desirable by your end-user and respond to a need.
Organizations may begin by appointing a Chief Design Officer to secure a design champion, followed by setting-up an internal design team or innovation hub to catalyze critical mass. As they mature, they engage the broader community by hosting hackathons or innovation competitions for ideas to materialize quickly. Furthermore, they may extend their reach further by co-creating with customers and other stakeholders in their eco-system, or collaborating with start-ups. These initiatives can all be a starting point but in and of itself will not bear the fruits of lasting innovation.
Therefore, the challenge organizations face is not simply the appetite to innovate but rather the ability to innovate at scale. This means setting up the organizations people and processes to be able to behave in a way that fosters an innovation rhythm. That means intentional initiatives that are more frequent and intertwined, rather than sporadic and unpredictable.
Scaling up on the pace of innovation is easier said than done, and necessitates its democratization by encouraging user-led innovation to market. If there is one thing that is clear though, it would be that innovation cannot happen in isolated pockets.
Organizations need to first acknowledge and recognize the need to reposition their themselves for innovation and create the conditions for a mindset change. This isn’t black magic though, and various organizations have reaped the fruits of innovation.
For example, Cisco established a corporate venturing program for start-ups called Cisco Entrepreneurs in Residence in 2013, and helped more than 27 small companies whose ideas align with the interest of its business units.
Netflix’s actively encouraged employees to think like business innovators, which has helped secured their leading position as a digital media platform with more than 81.5 million subscribers. Elsewhere, emotional intelligence training for new managers at FedEx helped strengthened its people-first leadership to help it become truly innovative across the organization.
Rewiring for innovation
As with practically all organization-wide endeavors, executive level support is critical to the success of initiating and sustaining innovation. Additionally, a new mindset and clear framework for change and the goal to scale. This may include willingness to change procedures and policies. These undertakings are not easy and will require leaders to have courageous conversations focusing around the following trio of areas.
First, put your people at the center. Invest the necessary time and resources into learning new cross-discipline skills, adopting new collaboration tools and creating the space that will unleash maximum human potential.
Secondly, a comprehensive plan to upscale innovation, but is flexible enough to respond quickly to market changes, without compromising the principles for scalability. As Matthew Bishop, editor for the Economist said, “the pace of change will never again be as slow as it is today.”
Finally, be open to leverage new technology and simplified collaboration tools that make innovation accessible across the entire workforce, not just within innovation teams.
In order to address today’s modus operandi of constant change, organizations rewiring for innovation is more critical now than ever. They must embrace digital transformation positively, encourage the tools necessary to collaborate across boundaries, while scaling in tandem.
Above all, organizational design that is people-centric, so it can respond to change accordingly. With that, an organization will be better equipped to innovate and become a successful business.